Minimum wage has been around since 1938. The purpose of minimum wage, according to Fair Labor Standards Act, was to maintain a “minimum standard of living necessary for health, efficiency and general well-being, without substantially curtailing employment.” As we have evolved as a nation, minimum wage has become stagnant. We will be comparing current (2013) averages to those of averages in 1950 to help support this claim. In 1950 minimum wage was set at 75 cents an hour. (.75) Today the minimum wage is 7.25 an hour. That is an increase of 866%! What an exciting statistic! Now here comes the cold water. A single statistic doesn’t mean much without other statistics or information to compare to. The average cost of a gallon of gas in 1950 was 18 cents while today it is 3.54. (increase of 1866%) If an individual desires to purchase a new car, on average they will spend 31,252 dollars. The average price for a new car in 1950 was 1,510 dollars. (increase of 1969%) On average, a new house in 1950 was 8,450 dollars, while today the price fluctuates around 257,200 dollars. (increase of 2943%) That 866% increase in minimum wage doesn’t look so great anymore. Let’s dig a bit deeper into the real issue. In 1950 if two people were working at minimum wage for 40 hours a week, 52 weeks a year, they would make 3,120 dollars a year. The average household income in 1950 was 3,210 dollars a year. (Two people working minimum wage made 3% less than the national average.) Today, two people making minimum wage at 40 hours a week, 52 weeks a year, earn 30,160 dollars. The national average today is 52,100 dollars a year. That is 43% below today’s national average! To better align the wage difference from 1950 and today we would have to raise minimum wage to about 12.15 an hour. That would bring the annual salary of two people working for minimum wage to 50,544. (3% below the national average.) These, along with other factors, are why the top earning percent of the nation have enjoyed such large percentage gains in total income, while everyone else beneath has had small increases or even decreases in total income. Minimum wage has crumbled as a tool to help maintain a “minimum standard of living necessary for health, efficiency and general well-being, without substantially curtailing employment.” It is time to rebuild. Jacob Lee
Posted on: Wed, 18 Sep 2013 02:37:56 +0000
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